研究报告全文：MN20Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateChinaLilang1234HKTurningaroundwithattractiveyieldTargetPriceHK483WearestillpositiveconsideringtheturnarounddecentYTDperformanceandPreviousTPHK446FY23Etargetanditslimiteddownside9dividendyieldUpDownside165FY22resultswasdraggedbypandemicin4Q22ChinaLilangssalesCurrentPriceHK415droppedby9YoYtoRMB31bnandnetprofitdeclinedby4YoYtoRMB448mn21and27belowCMBIestButthisisnotasurpriseespChinaConsumerDiscretionarywhenalargeportionofstoreshadchangedintoconsignmentfromWalterWOOwholesaleGPmarginsurgedto460inFY22vs419inFY21just85237618776becauseofprovisionsaroundRMB120mninFY21andwrite-backofthatwalterwoocmbicomhkaboutRMB20mninFY22AdjustedGPmarginroseby12pptmainlydueto15-20ASPhikeforsmartcausalcollectionandthereforeNPmarginRaphaelTSEcanstillwentupto145from13985239000856raphaeltsecmbicomhkButtheinventoryconditionisquitehealthyInventorydaysincreasedto195daysinFY22from145inFY21butbetterthanthe217daysin1H22StockDataWefindthatreasonablewhenwealsoconsiderthebusinessmodelMktCapHKmn4150changesinrecentyearsfromwholesaletoconsignmentandtodirectretailAvg3mthstoHKmn40aswellasthebeginningofprovisionwrite-back52wHighLowHK415325TotalIssuedSharesmn1000RetailsaleshasalreadyimprovedinYTD2023ManagementalsoSourceFactSetmentionedthatretailsalesgrowthhadimprovedtoMSDinJan-Febandcloseto10inMar2023vs23dropin4Q22ShareholdingStructureMrWangFamily673TurnaroundishereandFY23EguidanceisinlinewithourexpectationValuePartners11TheCompanyisnowtargetinga10retailsalesgrowthinFY23EandSourceHKExthatshouldbeback-loadedCMBIestHSDlow-teensin1H23E2H23ESharePerformanceWebelievethatisachievablebecauseof1lowbaseinFY222improvedAbsoluteRelativeproductivityafterthereformseginventorysharingbetweenconsignment1-mth38110storesanddirectretailstoresaremoreeffectiveincatchingsales33-mth5955resumptionofstoreopenings100netnewstoresinFY23E5050for6-mth206160LILANZsmartcausalvs89storeclosuresinFY22and4increasedeffortsSourceFactSetonnewretailwillopenmorelive-streamingworkshopsacrossthecountry12-mthPricePerformancefrom2toabout20etcMarginwillcontinuetoimprovedespitetheincreasedeffortsonmarketingTheCompanymaytakepartinafashionshowoverseasinFY23EhenceAPexpenseswillstillbehighat10-13ofsalesCMBIestat11Butthanksto1GPmarginexpansionaidedbyfastergrowthfromthehighermarginsmartcasualande-commerceand2operatingleverageNPmarginwillgoupto151inFY23Evs145inFY22SourceFactSetMaintainBUYbutraisedTPtoHK483WecutourFY23E24ENPforecastsby2424tofactorthedragsduringpandemicOurnewNPisbasedon10xFY23EPEupfrom7xasithasturnedaroundItisattractiveat9xFY23EPEand9FY23EyieldespwhencapexcycleisnowoverEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn33793086342036993945YoYgrowth261871088267OperatingprofitRMBmn533519637730801NetprofitRMBmn46814481516958106329EPSReportedRMB039037043049053YoYgrowth1614215412489PEx8799867670PBx1112111110Yield83758798107ROE128120134145151NetgearingNetcashNetcashNetcashNetcashNetcashSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk20Mar2023EarningsrevisionFigure1EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue34203699394540364442na-153-167naGrossprofit15921747186518942145na-159-186naEBIT637730801785924na-188-210naNetprofitatt517581633636744na-187-219naDilutedEPSRMB04320485052905290618na-185-215naGrossmargin465472473469483na-04ppt-11pptnaEBITmargin186197203194208na-08ppt-11pptnaNetprofitattmargin151157160158167na-06ppt-1pptnaSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBISConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue34203699394541154613na-169-198naGrossprofit15921747186519302228na-175-216naEBIT637730801841924na-243-210naNetprofitatt517581633680763na-240-238naDilutedEPSRMB04320485052905780635na-253-236naGrossmargin465472473469483na-04ppt-11pptnaEBITmargin186197203204200na-18ppt-03pptnaNetprofitattmargin151157160165165na-14ppt-08pptnaSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE220Mar2023ValuationFigure3Peersvaluation12mUpROE3yrsYieldPriceMktCapYearPExPBxTPDown-PEGxCompanyTickerRatingLCLCsideHKmnEndFY1EFY2EFY1EFY2EFY1EFY1EFY1EHsharesApparelChinaLilang1234HKBUY483415164970Dec-22998610101222375BosidengIntl3998HKBUY410434-647320Mar-2217514831281901240JnbyDesign3306HKBUY1176984205105Jun-22857124222761386CosmoLady2298HKNRna042na945Dec-21369123040423302naGiordano709HKNRna223na3525Dec-2211797nana1140776Koradior3709HKNRna1024na7209Dec-21827014121440449EspritHoldings330HKNRna071na2010Dec-21nananana5500naBauhausIntl483HKNRna052na191Mar-22nananana57600naAvg1559917161560765Med1089114121330675A-sharesApparelNingboPeacebird603877CHNRna1959na10637Dec-21307155212067189513JoeoneCoLtd601566CHNRna1119na7328Dec-21na2531716070004FujianSeptwolves002029CHNRna585na5038Dec-2117715107074032naHlaCorpLtd600398CHNRna621na30570Dec-2112210317151503241JiangsuHongdou600400CHNRna385na10105Dec-21110064227261529naLancyCoLtd002612CHNRna2627na13246Dec-21200561839371623202ShenzhenHuijie002763CHNRna761na3555Dec-21nananana9100naEllassayFashion603808CHNRna1090na4585Dec-212851321413516007BobaolonCo002776CHNRna300na1839Dec-21nananana139100naAvg666293201910625313Med2961551716403207InternationalApparelHugoBossBOSSGRNRna5630na33281Dec-2216413931262051024NextNXTLNNRna657800na81315Jan-2211913164577633330HennesMauritzHMBSSNRna12272na151997Nov-222391714240640553IndustriaDeDisenoITXSMNRna2863na749253Jan-2320218651482522545OvsSpaOVSIMNRna236na5760Jan-2299930709631026PvhCorpPVHUSNRna7271na36163Jan-2287811009911302VfCorpVFCUSNRna2142na65337Apr-221039526231191184MarksSpencerMKSLNNRna14160na26695Apr-22879909091135322Avg13812430282090836Med11111528251160328SourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE320Mar2023Figure4Forward12MPEvaluationbandSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE420Mar2023AssumptionsFigure5ChinaLilangskeyassumptionsMajorassumptionsFY21AFY22AFY23EFY24EFY25ESalesbysegmentRMBmnLILANZ27372535278630083206SmartCasual642551634691739Total33793086342036993945SalesbysegmentgrowthLILANZ246-74998066SmartCasual329-1421509070Total261-871088267SalesnetworkbysegmentLILANZ24432393244324932543SmartCasual290251301331361Total27332644274428242904SalesnetworkbysegmentgrowthLILANZ-09-20212020SmartCasual-17-13419910091Total-10-33382928TradefairsalesgrowthSpringSummer200381000000Fall150251000000Winter100-2301000000GPmarginsbysegment419460465472473OpexbreakdownStaffcosts3337363636DA3037373838RD3840434343Provisionwriteback0000000000AP101130110110110Sellingdistributioncostssales235257242238234Adminexpensessales5158555453OPmargins158168186197203Effectivetaxrate166181200220230NPattmargins139145151157160NPattgrowth-160-4315412489SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE520Mar2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue268133793086342036993945Costofgoodssold147719641666182819522080Grossprofit120414151420159217471865Operatingexpenses658971973102310911143Sellingexpense492795792827881923Adminexpense124255404039RDexpense120129124147159170Others5852101112Operatingprofit651533519637730801Otherincome1068972687479ShareoflossesprofitsofassociatesJV000000EBITDA655536523639732803Otheramortisation344222Interestincome453452445056Interestexpense1624353535Otherincomeexpense000000Pre-taxprofit695561547646745822Incometax1389399129164189Minorityinterest000000Netprofit557468448517581633BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets361832732772307733793664Cashequivalents17391572960108812481398Accountreceivables121079584393410101077Inventories66789488597110371105Prepayment000000STbankdeposits21281818181Othercurrentassets003333Non-currentassets139417352706264125722530PPE92412001213115010831043InvestmentinJVsassos000000Intangibles875311Othernon-currentassets4625281488148814881488Totalassets501150085478571859516195Currentliabilities128812611439152515921660Short-termborrowings37119279279279279Accountpayables103687088897410401109Taxpayable152175197197197197Othercurrentliabilities629875757575Non-currentliabilities7073256256256256Long-termborrowings00187187187187Othernon-currentliabilities707369696969Totalliabilities135813341695178218481916Sharecapital106106106106106106Retainedearnings000154320496Otherreserves354835683677367736773677Totalshareholdersequity365436733782393641034278Minorityinterest000000Totalequityandliabilities365436733782393641034278PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE620Mar2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation695561547646745822Depreciationamortization31100115168143120Taxpaid15510085129164189Changeinworkingcapital175690917667Others2710777353535Netcashfromoperations773599654629683721InvestingCapitalexpenditure2253023791037479Acquisitionofsubsidiariesinvestments332000Others3825795000Netcashfrominvesting19128011751037479FinancingDividendpaid521446341363414457Netborrowings073361000Proceedsfromshareissues000000Sharerepurchases000000Others69109111353535Netcashfromfinancing59048390398449492NetchangeincashCashatthebeginningoftheyear17511739157296010881248Exchangedifference430000Others8164612128160150Cashattheendoftheyear17391572960108812481398GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue267261871088267Grossprofit142175041219768Operatingprofit3351822622714697EBITDA3341812522114697Netprofit3141604315412489PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin449419460465472473Operatingmargin243158168186197203EBITDAmargin244159169187198203ReturnonequityROE154128120134145151GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx040401020202Currentratiox282619202122VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE758799867670PEdiluted758799867670PB141310111110PCFPS678261696460Divyield88688489100109EV333073602544693434164181540315EVSales121114131110EVEBITDA516785685750SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE720Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE8